ikea case study presentation
TRANSCRIPT
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IKEA’s Global Sourcing ChallengeBy: Parina Agarwal, MinHee Huh, Molly McGowan, and King Tan
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Issue with Child Labor with IKEA’s Suppliers
Social issue with Child labor
German TV station and Swedish television documentary
Remain or Exit?
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IKEA should exit India for the following
reasons…Past Issues
Time
Cost Evaluations
Reputation at Stake
Company’s Mission
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Issues with IKEA in the past…
Formaldehyde Incident
2nd Formaldehyde Incident
Pakistan Child Labor Incident
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Wasting Time is a mortal sin at IKEA
Pakistan Child Labor Situation
Learn from old mistakes and approach using simplicity
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Incur few cost now, and reduce costs in the
futureLoss of suppliers will not stop IKEA
Opportunity Cost
Protecting IKEA Brand and Image
Previous Losses
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Promoting good management and building reputation
Past issues hurt reputation
Strong relationships with suppliers
Good management.
“We have always worried more about finding the right management for our suppliers than finding high tech facilities. We will always help good management to develop their
capacity.”
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Adhere to the Mission Statement
• “To create a better life for everyday people.”
• Stop bonded labor
• Encourage suppliers
• Start a CHANGE
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We recommend to re-enter in the future!
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Conclusion
We recommend to exit India because of
Their past
Time
Costs
Reputation at Stake
Company’s Mission
• We plan to return to India but only if they make a change for the better.
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Works Cited
Bartlett, Christopher. "IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A).” Harvard Business Review, 2006.
http://www.ikea.com/
http://www.rugmarkindia.org/
http://www.ngosindia.com/